INTERNSHIP REPORT

ON
“PRACTICAL EXPOSURE TO FINANCIAL AUDITING”

MOHAMMED SUFIYAN

VI SEMESTER BBA

Reg No: U01BL21M0024

UNDER THE GUIDANCE OF:

PROF: SMITHA. B

DEPARTMENT OF COMMERCE AND MANAGEMENT,

VIDYAVARDHAKA FIRST GRADE COLLEGE

MYSURU – 570001

For the academic year 2023-24

VIDYAVARDHAKA FIRST GRADE COLLAGE

(AFFILIATED TO UNIVERSITY OF MYSORE, MYSURU)

SHESHADRI IYER ROAD, MYSURU-570001

“2023-24”
I

ACKNOWLEDGEMENT

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I would like to thank my internship program mentor Prof. Smitha.B ma’am from the
bottommost part of my heart for her careful guidance, teaching me and giving me
instructions which actually helped me to accomplish the internship report successfully.

I would like to thank my external mentor Mr. Razaq Sha sir for giving me the opportunity
to perform my internship program under their supervision in Auditing & Taxation.

I would also like to express my humble gratitude to all the colleagues in the organization
and specially my department for showing exceptional belief my capabilities and trust me
with different important tasks and helped me with their guidance and sharing their
valuable knowledge. Colleagues of my department also helped me incredibly in preparing
this report.

To the best of my knowledge and belief, this report is original and bona fide work
prepared by me.

Date :
Place : MYSURU MOHAMMED SUFIYAN
Reg. No: (U01BL21M0024)
II

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 VIDYAVARDHAKA FIRST GRADE COLLEGE
SHESHADRI IYER ROAD, MYSURU – 570001

Prof. Smitha. B
Assistant Professor

CERTIFICATE

This is to certify that MOHAMMED SUFIYAN (Regd. No: U01BL21M0024) has

carried out his Internship at SHA & CO, and prepared Internship report under my
guidance in partial fulfillment for the award of BACHELOR OF BUSINESS
ADMINISTRATION (BBA) degree as prescribed by the University of Mysore [NEP
scheme].

Date:
Place: MYSURU

Signature of the mentor Signature of the Principal

III

CONTENTS

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 SL.NO PARTICULARS PAGE.NO

1 Internship Certificate

2 Organizational Profile 1-2

3 Vision & Mission 3

4 Introduction 4-7

5 Products and Services 8–9

6 Work Allotment 10

7 SWOT analysis 11 - 14

8 Problem Solved 15 – 16

9 Conclusion 17

10 Reference 18

IV

ORGANIZATIONAL PROFILE

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Name of Intern: MOHAMMED SUFIYAN
Address: #3333/4A , Wesley road, Tilak Nagar, Mysuru, Karnataka (570001)
Contact number: +91 6363015695

HISTORY
Established in the year 2011, SHA & CO is a well-established Auditing Firm
located in Mysore, Karnataka. With 7years of experience in the industry, we pride
ourselves on offering a wide range of high-quality Auditing services to cater to the
diverse needs of our clients. Our mission is to provide exceptional and premium
services and consultancy that maintains the books of accounts of our clients. From
services like INCOME TAX, GST, TDS, LABOUR, FSSAI, PAN, TAN.” our
extensive services ensures that clients can find exactly what they need. Through
skilled Accounting, personalized Auditing service, and a commitment to precision,
we strive to differentiate ourselves from competitors and become the go-to
destination for all Auditing & Taxation needs in the area."

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We’ve cultivated a reputation for excellence in customer service. Our carefully
curated accuracy of work encompasses everything from Taxation to consultancy,
ensuring that our clients are updated to the due dates of tax payments.
At SHA & CO, we understand the importance of providing accurate Auditing
services, whether it’s a small firm, vendor or a company.

GENERAL INFORMATION:

Company Name SHA & CO

Date of Establishment 2018 (7 years)

Type of company Proprietorship

Auditing
Type of business
& Taxation
#07 Lalamiyan Taleem complex, K.T.
Address street road, Lashkar Mohalla, Mysuru,
Karnataka (570001)
+91 81978 17826
Contact number
+91 81055 09590

E-mail sharazaq@gmail.com

Company Status Active

VISION AND MISSION

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VISION:
Our vision is to become the go-to destination for exquisite Auditing experiences, where
every audit is elevated by the beauty of our carefully curated accounting. We strive to
provide our customers with a diverse range of highly-skilled services like filing of
INCOME TAX, GST, TDS, LABOUR, FSSAI, PAN, TAN.
Our vision encompasses a desire to foster a culture of appreciation for the art of Auditing
& Taxation. We envision our Auditing firm as a place where clients not only find accurate
and precise services but also gather inspiration and guidance to create memorable
Auditing experiences for their businesses. Through collaborations with local accountants
and Chartered Accountants, we aspire to showcase the rich heritage and skilled book
keeping of Mysore while staying at the forefront of contemporary taxation services. Our
vision extends beyond mere transactions to building lasting relationships with our clients,
based on trust, expertise, and shared passion for the finer aspects of life.

MISSION:
Our mission is to inspire and empower business individuals to express their personal
queries and problems through the art of auditing, while also promoting sustainability by
offering errorless and clear-cut services. With a commitment to exceptional customer
service and a passion for timeless elegance, we aim to enrich the auditing experiences of
our community and beyond.
We are dedicated to providing personalized assistance and guidance to our customers,
ensuring that they find the perfect audit to suit their individual preferences and needs. We
are committed to maintaining transparent and ethical business practices, sourcing our
services responsibly and supporting fair trade principles. Moreover, by upholding these
values and principles, we strive to be not just a Auditor but a trusted partner in enhancing
the auditing experiences of our customers and the well-being of our community.

INTRODUCTION

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 This report contains a brief overview of
internship experience of MOHAMMED SUFIYAN at SHA & CO. This Internship
lasted from 09-03-2024 to 09-04-2024.

This internship aimed to provide me industry level experience and practice

exposure. Throughout the internship I participated in various task gaining insight into the
real world challenges and day to day problems faced in the firm. Under the guidance of
my guide Mr. RAZAQ SHA I got the opportunity to enhance my professional skills by
engaging in various task like, Customer service and interaction, Explaining customer
about the product and brand, communication skills on their guidance, knowing that their
financial affairs are in the hands of experts who prioritize honesty and confidentiality.

Meaning of Auditing:

Auditing originates from the Latin term “Audire”, which means “to hear,” - just as in ancient
times auditors used to listen to officers and people of authority to confirm the validity of their
words. Over the years, the role of auditing evolved to verifying written reports: specifically,
the financial records of individuals and businesses.

By definition, auditing is an official inspection and verification of the credibility of financial

reports. Audits can be conducted by either a business’s management as an internal control
process or by the government, in case they notice suspicious financial activity.

What Is Auditing:

Auditing, or a financial audit, is an official examination and verification of a business’s

financial records. The main goal of auditing is to make sure that a company’s financial
statements are accurate and are following regulatory guidelines. Auditing also gives investors,
creditors, and other stake holder’s reasonable assurance that they can rely on a company and
its integrity.

Now, it’s important to note that auditing doesn’t provide a complete guarantee that every digit
recorded in a company’s financial reports is accurate. Auditors work within a specific,
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reasonable margin of error known as materiality. The volume of materiality depends on the
size of the company and its reported revenue and expenses.

For small businesses, an accounting error of a few thousand dollars might be significant, but
for a large corporation like Apple or Amazon, such a material mistake may be considered as a
conventional mistake and not a cause for concern.

Want to learn how to correctly manage and prepare your financial reports? Head over to our
guide on financial reporting for small businesses.

The Importance of Auditing:

Credibility and Reliability:

With an internal auditing system, your business can create accurate and reliable financial
reports through which you can gain insights on which segments or product lines are
performing best and how to properly allocate resources. Additionally, regular auditing will
make your shareholders trust that your accounts are true and fair and that it’s safe to invest in
your business.

Preventing Fraud:

If the government audits your financial statements and finds that your business has been
manipulating its financial health, or hiding revenue and losses, you’ll likely deal with severe
fees and legal punishments. Your business will also acquire a bad reputation, and you will
most likely lose reliability in the eyes of your customers and stakeholders.

Recurring internal audits by a professional auditor or accountant of the company play an

important role in detecting these fraud cases before they become substantial and problematic.
Having a rigorous auditing system set in place alone prevents and scares employees or
vendors from attempting a scheme to defraud your business in the first place.

Payroll errors are common due to manual data entry, even with automation. Regular audits
not only catch mistakes and prevent fraud, such as ghost employees, but also help avoid
government penalties for financial manipulation, safeguarding the business's reputation and
stakeholder trust. Implementing a robust internal audit system deters potential fraud, making it
a crucial preventative measure.

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Main Types of Auditing:

Depending on who performs financial audits, we categorize audits into three main
categories: internal, external, and government audits.

1. Internal Audits

An internal audit is an audit performed by a qualified auditor or accountant who is part of

your company. This audit helps assure your business is in compliance with laws and
regulations and is accurately recording financial information. Regularly performing these
internal audits also ensures risk management and guards you against possible issues such as
fraud, waste, or financial abuse.

You have to identify which department you wish to audit first during these internal audits.
Next, the chosen auditor will collect as much information on that department’s internal
control process, and conduct fieldwork testing. Once the evaluation is completed, the auditor
will prepare an official auditor’s report, follow up with management regarding any issues
found, and suggest possible solutions.

2. External Audits:

An external audit is an audit of your financial statements made by an independent, third-

party professional. These types of audits can be extremely helpful as they’re more unbiased
and reliable than internal audits.

External auditors can be candid and honest about the issues found during the audit, without
affecting daily work relationships within the business. Key responsibilities of an external
auditor include planning and implementing audit procedures, examining accounts and
financial statements, analyzing business risks, preparing an audit report, and discussing the
end conclusion with the management department of their client.

3. IRS Audits:

Internal Revenue Service (IRS) audits, or tax audits, are government reviews conducted to a
business to ensure that financial data has been reported in compliance with tax laws.

Sometimes, IRS audits are conducted randomly, but more often than not IRS selects
businesses based on suspicious activity, such as unusual deductions or uncommon

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Sources of income. If you’re selected, the audit will either be conducted by mail, at the IRS
offices, or in your business field.

Mail audits are documentation requests from the IRS that you will receive and send via email.
Office audits consist of in-depth, in-person interviews where IRS agents review your tax
returns and examine all relevant information to legitimize your financial reporting. Field
audits within your business premises are similar to office audits, but the IRS agents will also
make assessments based upon your business place and the processes occurring there.

In conclusion, SHA & CO, stands tall as a stalwart in the Auditing and Tax Consultancy,
fostering long-lasting relationships with customers through their unwavering commitment
to excellence. With their vast experience, skilled team, and prime location, they are well-
positioned to meet the financial needs of businesses and individuals, ensuring continued
success I would like to express my gratitude.

Meaning of service:
Customer service also known as Client Service, it is a provision of service to customers
before, during and after a purchase. Customer service is an organization's ability to
supply their customers' wants and needs. Excellent customer service is the ability of an
organization to constantly and consistently exceed the customer's expectations.
Improving customer service involves making a commitment to learning what our
customer’s needs and wants are and developing action plans that implement customer
friendly processes during and after a purchase.

What is customer satisfaction?

Customer satisfaction (CSAT) is a measure of how well a company’s products and
services meet customers’ expectations. It reflects your business’ health by showing how
well your products are resonating with buyers.

What does it take to satisfy the client?

Insights Organizations should not assume they know what the client wants. Instead, it is
important to understand the voice of the client, using tools such as client surveys, focus
groups, and polling. Using these tools, organizations can gain detailed as to what their
client want and better tailor their services or products to meet or exceed client
expectations.
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 PRODUCT AND SERVICE

PRODUCTS:
These are some services which we come up with in SHA & CO.

SERVICE:
SHA & CO, nestled in the heart of Mysore, Karnataka, offers a
delightful array of services tailored to elevate your Auditing & Taxation
experiences. With a keen eye for quality and precision, we provide
personalized consultation services to help you curate the perfect auditing
services that reflect your unique wants and preferences. Our expert team
is dedicated to assisting you in selecting exquisite services and
assistance for every audit related queries, ensuring each service leaves a
lasting impression. Additionally, we offer convenient taxation services,
ensuring you promptness and safety. Experience the epitome of elegance
and convenience with SHA & CO.

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 Online/Offline Income Tax Audit Service. ..
 Consulting Firm One-Time Vendor Audit Services. ...
 Consulting Firm Retainer Based Auditing And Accreditation. ...
 Consulting Firm One-Time ATM Auditing Services. ...
 Consulting Firm One-Time Water Audit Consultancy Service, Type Of
Industry Business: Auditing Services. ...
 Compliance Audit Services.

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 WORK ALLOTMENT

 Client Consultations:
- Assign staff members to conduct personalized consultations
with clients to understand their auditing needs and preferences.

 Accounts Management:
- Delegate responsibilities for managing Accounts, including
restocking accounts, organizing audits, and tracking real-time
errors.

 Order Processing:
- Assign team members to handle order processing, including
inputting client orders, arranging service reservations, and
coordinating with the clients for fulfillment of their needs.

 Customer Service:
- Allocate staff to provide attentive customer service, addressing
inquiries, assisting with service selection, and resolving any issues
or concerns promptly.

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 SWOT ANALYSIS

SWOT analysis examines the strength, weakness, opportunities and

challenges that a firm faces. SWOT analysis is a tried and true tool that
enables a company like R.N. Khanna to compare its business
performance to that of its competitors. It will give us a strategic analysis
of its internal and external environment which is crucial for
understanding the SWOT. SWOT analysis is important because it is
important for business development, risk assessment decision making.

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Below is a report on SWOT analysis of SHA & CO:
1) Strengths:

a) Expertise: The firm is equipped with highly qualified CAs who has in
depth knowledge and expertise in the field of finance. These CAs help their
client in auditing, tax consulting and other finance related works.
b) Client base: The firm has a diverse and loyal client base which includes
individual taxpayers, small and medium business, and organization.
c) Industry experience: The firm has years of industry by serving many
types of different clients on day to day basis which has helped them in
getting specialized knowledge in every sector and also to understand the
sector specific challenges.
d) Professional network: After working in the same industry from almost 2
decades the firm has built a strong relation with banks, financial institutions,
legal experts and other professionals that can help the firm to resolve a client
related issues.
e) Reputations: The firm has earned reputation by providing high quality
services and delivering reliable financial solutions to clients.
f) Location advantage: Being located Karnataka the capital of Bangalore.

2) Weaknesses:

a) Technology adoption: The firm delays in adopting a new

technology and often use the old accounting software which give
their competitors the first mover advantage which leads to
potential inefficiencies.
b) Communication skills: Through communication skill one can
express their views and thought on a particular topic more clearly.

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 c) Client retention: The firm is not able to retain its client one of the
main reason is high services rate, secondly this can be also because
of highly competitor market.
d) Sole Proprietorship: As a sole proprietorship, the company’s
growth might be limited due to financial constraints and a reliance
on the owner’s resources and expertise.
e) Recruitment Difficulties: Hiring and retaining skilled
professionals can be more challenging for a small company
compared to larger firms, as they might struggle to offer
competitive salaries or benefits.
f) Growth Potential: As the company expands its client base or
takes on more complex projects, the limited human resources may
hinder its ability to scale up and handle increased demands.

3) Opportunities:

a) Niche specialization: The CA specialization is one of the niche

specialization in the country as its one of the hard course to pursue
not many people are able to clear the CA exam because of this its
creates an opportunities for the existing CA to make the most of it.
b) Market Demand: The demand of CA has been a rise because of
regular change in the tax laws. Complex regulations and economic
fluctuations. They help in educating these changes to the general
public.
c) Merger and Partnership: The CAs in the country also help in
merger and partnership between two or more firms, they form a
strategy and also find the best way to amalgamate. Through this
the firms expands their client base and service offering.

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 4) Challenges:

a) Competition: These CA firms are facing immense competition in

the market firstly from other CA firms and secondly from
accounting service provider and even technologies and companies
entering into this scene.

b) Regulatory compliance: With the rapid change in tax laws and

accounting standard its sometimes very hard for the CA to cope
with every change as it requires training and professional
development This results in lack of trained people which reduces
the workplace productivity, loyalty and management.

c) Client retention: With many players into the scene its sometime
hard for the firm to retain every customer.

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 PROBLEM SOLVED

Introduction

Problem-solving lies at the heart of effective auditing practice. As an intern in the

field of auditing, I have encountered numerous challenges that demanded astute
problem-solving skills. This section of the internship report delves into the
significance of problem-solving within the auditing context, showcasing how these
skills were applied to resolve complex issues encountered during the internship
period.

Understanding the Role of Problem Solving in Auditing

Auditing involves the systematic examination and verification of financial records,

processes, and systems to ensure accuracy, compliance, and integrity. However,
audits are rarely straightforward. They often present complex issues, discrepancies,
and irregularities that require careful analysis and resolution. Effective problem-
solving skills are indispensable for auditors to navigate through these challenges
successfully.

Challenges Encountered

1. Data Discrepancies: Discrepancies in financial data were a common challenge.

These variances required thorough investigation to identify their source and rectify
them appropriately.
2. Compliance Issues: Ensuring compliance with regulatory standards and
organizational policies was another recurring challenge. Non-compliance issues
needed to be addressed promptly to mitigate risks and ensure adherence to legal
requirements.
3. Complex Transactions: Auditing often involves scrutinizing complex financial
transactions. Understanding the intricacies of these transactions and identifying
any irregularities demanded keen analytical skills and attention to detail.

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4. Communication Barriers: Effective communication is essential in auditing,

especially when discussing findings and recommendations with clients.

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 Overcoming communication barriers, such as language differences or resistance
from stakeholders, required tact and diplomacy.

Approach to Problem Solving

Addressing these challenges required a structured approach to problem-solving:

1. Identification: The first step in solving any problem was to clearly identify its
nature and scope. This involved gathering relevant information, analyzing data,
and understanding the underlying issues.
2. Analysis: Once the problem was identified, a comprehensive analysis was
conducted to determine its root causes and potential implications. This phase often
involved collaboration with team members and consulting relevant resources.
3. Solution Development: With a clear understanding of the problem, I worked
collaboratively with my team to devise practical solutions. These solutions were
tailored to address the specific needs and constraints of each situation.
4. Implementation: Implementing the proposed solutions required careful planning
and coordination. Effective communication with stakeholders was crucial to ensure
buy-in and cooperation throughout the implementation process.
5. Evaluation: After implementing the solutions, it was essential to evaluate their
effectiveness and impact. This involved assessing whether the desired outcomes
were achieved and identifying any lessons learned for future audits.

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CONCLUSION

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I would like to conclude this report by saying that this internship was a valuable
experience for me. I learned many new things in the field of accounts/finance.
Throughout my internship I gained practical knowledge on complex topics such as
taxation, financial management. I also enhanced my technical skills by working on
software such as BUSY 21, tally prime and MS excel.

I would like to thank SHA& CO., and specially Mr. Razaq Sha sir for
providing me this opportunity to work under him and gain the industry experience.
Throughout the internship tenure I connected with so many new people, clients and
learnt a lot of thing in the file of direct taxation, bookkeeping etc. Throughout my
internship I also worked and developed my communication skills With the
exposure to variety of clients I was able to understand the dynamics of industry
and the critical role accountants play in ensuring the financial health of the
company.

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REFERENCE

BOOKS:
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  "Principles of Auditing: An Introduction to International Standards on
Auditing" by Rick Hayes, Philip Wallage, and Hans Gortemaker
 A comprehensive guide on the principles and standards of auditing.
 "Auditing and Assurance Services: An Integrated Approach" by Alvin A.
Arens, Randal J. Elder, and Mark S. Beasley.
 Offers in-depth insights into auditing processes and methodologies.

Articles and Journals:

 "The Role of Auditing in Public Sector Governance" by The Institute of
Internal Auditors
 Discusses the significance of auditing in public sector governance.
 "Audit Quality and Auditor Independence" by William R. Kinney Jr.
 Examines the factors affecting audit quality and the importance of auditor
independence.

WEBSITES:
 Public Company Accounting Oversight Board (PCAOB)
 Website: https://pcaobus.org/
 Description: The PCAOB oversees audits of public companies and provides
auditing standards, rules, and inspection reports. Their site includes
resources for auditors and the public.

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